S. 2924: Small Entity Update Act

The Small Entity Update Act is a proposed bill that aims to require the Securities and Exchange Commission (SEC) to review and possibly revise the definition of "small entity" as it applies to regulations in the securities laws. Here are the key aspects of what the bill would do:

Study of Current Definition

The SEC is mandated to conduct a study of the definition of "small entity" within one year after the bill becomes law. This study will focus on the following:

• The consistency of the current definition with previous findings from the Regulatory Flexibility Act.
• Assessment of the growth of financial markets since the last revision of the definition.
• Proposals on how to adjust the "small entity" definition to ensure that a significant number of entities are included under this classification.

Reporting Requirements

After conducting the study, the SEC must submit a report to Congress that includes:

• The results of the study on the current definition of "small entity."
• Recommendations for amending the definition to expand the coverage of small entities.

Rulemaking Procedures

The SEC must revise its rules based on the findings of the study. This process will include:

• Public notice and comment to allow for input from stakeholders before finalizing any new definitions or rules.

Inflation Adjustments

Once the SEC implements new definitions for "small entity," it is required to make adjustments to financial figures used in the definition every five years. These adjustments will be based on changes in the Consumer Price Index as published by the Bureau of Labor Statistics.

Overall Purpose

The overall purpose of this bill is to ensure that the definition of "small entity" remains relevant and accurately reflects the current economic environment, thereby possibly affecting how various small businesses and organizations are treated under securities regulations.

Relevant Companies

• None found